Hello borggrebe-jerry,
Thank you for joining us today!
Distributions from your 403(B) plan is considered taxable on the Federal return and considered ordinary income, UNLESS you made your contributions after tax dollars, for an example, like a Roth IRA.
As for the State, it depends on your state rules. Each state is allowed to determine how they want to treat Retirement distributions. Some states tax the whole distribution amount, some not at all.
These states do not have income tax at all:
- Alaska
- Florida
- Nevada
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
These states do not tax Retirement income:
- Illinois
- Iowa
- Mississippi
- Pennsylvania
Thanks again for participating today!